AGA: Natural Gas System Delivered As Promised During Record Winter

Washington, D.C. – The natural gas delivery system in the United States achieved historic levels of performance this past winter. More natural gas was delivered through more pipelines to more customers than ever before, and customer bills remained affordable. The American Gas Association (AGA) today released Promise Delivered, a study of the planning, preparation and performance of the natural gas system during the 2013-14 Winter Heating Season.

“America’s natural gas utilities prepare every year, knowing that the eventuality of an extraordinary winter may be just around the corner. That event clearly materialized during the 2013-14 winter heating season,” said AGA Chairman Gregg Kantor, who is also the President and CEO of NW Natural in Portland, Ore. “Utilities plan all year for the possibility of extreme temperatures and employ a portfolio approach to gas purchasing and storage utilization, with the idea of meeting customer requirements affordably even on the coldest days of the year. Before last year’s extraordinary winter concluded, LDCs were already preparing for the next winter cycle. Reliable performance is what our customers have come to expect from us, and you can’t get there without this level of planning and preparation.”

The United States faced extreme temperatures and record-setting natural gas consumption during the 2013-2014 winter heating season, which is defined as November 2013 through March 2014. This past winter also saw the top five days for natural gas consumption for the country as a whole. On January 7, 2014, the United States set the single day record for natural gas consumption at 139 Bcf – almost double the daily average. Families used more natural gas than ever to keep warm, and power generators pulled unprecedented volumes of gas to maintain electric system reliability. In addition, industrial demand of natural gas surged, and even exports to Mexico were consistent.

Despite these record conditions, residential customer bills increased only 10 percent on average from the prior winter – an increase mostly due to higher consumption. AGA expects relatively warmer temperatures this coming winter based on information from the climate Prediction Center, which may lead to a reduction in demand. Natural gas prices are likely to be slightly higher, resulting in an increase in customer bills of about seven percent this winter.

AGA President and CEO Dave McCurdy said, “A new bar has been set. Our nation has an incredible abundance of natural gas and a pipeline network that is the safest energy delivery system in the nation. As more homes and businesses continue to rely on natural gas, and we see increased and strategic use of American natural gas across all sectors, we are confident that utilities will continue their record of reliability, delivering clean and affordable energy.”

The United States now produces approximately 14 billion cubic feet (Bcf) more today on a daily basis than in 2002-03, a similarly cold winter in the U.S., and natural gas reserves have also grown by almost 63 percent in the past decade. In addition, natural gas working storage capacity has increased by more than 18 percent in the same period, as utilities and others have added storage capacity by building, or have contracted for sufficient volumes in order to assure storage was available when it was needed most. This growth has been accompanied by increased efficiency as residential and commercial sector use per customer has declined by 25 percent from 2003 levels. More than 177 million Americans use natural gas, and our nation’s pipeline network has expanded more than 11 percent compared to ten years ago.

Further examination of critical storage inventories shows that working gas injections have remained solid with national inventories at 2.9 Tcf for the week ending September 12, according to the Energy Information Administration. After a three-week warm stretch nationally late in the summer, temperatures have moderated, leaving a strong supply picture for continued injections during September and October. This fact, along with a net injection season that can continue past November 1, points to an ending inventory which may reach 3.5 Tcf.

“This winter was not only a validation of years of efforts by utilities, pipelines, producers and regulators, it was a signal that continued investments, planning and analyses are prudent and necessary as we begin to understand this era of resource abundance and accompanying opportunities for our economy,” said McCurdy. “We expect the trend of greater demand to continue, and it will be accompanied by substantial growth in domestic natural gas supplies and increased infrastructure development to deliver this gas to more customers. This supply-demand balance lends itself to continued market stability, thereby creating more opportunities for natural gas in our nation.”

Alpha Natural Resources Selects Plum Energy to Supply LNG for Eagle Butte Mine Haul Trucks

Alpha Natural Resources, Inc., announced today that Plum Energy LLC will construct a liquefied natural gas (LNG) plant on property adjacent to Alpha Coal West Inc.’s Eagle Butte Mine, near Gillette, Wyoming. The Plum Energy facility will supply LNG to Alpha Coal West’s mine haul vehicles, producing cost efficiencies and fuel savings for its mining operations.

Natural gas becomes LNG when the gas is cooled to more than 260 degrees below zero and the volume becomes 1/600th of the gaseous form, turning the gas into a liquid fuel. LNG is a clean, efficient fuel and is extremely attractive from a price point when compared to the cost of conventional diesel fuel.

Alpha Coal West began testing LNG technologies developed by GFS Corp. in trucks at the Belle Ayr Mine in 2012, beginning a pilot program of the world’s first LNG-powered mine haul trucks. After 18 months of daily operation, Alpha Coal West decided to proceed with the conversion to LNG of its 16 Caterpillar 793 haul trucks at the nearby Eagle Butte Mine. Alpha Coal West expects the alterations to the trucks, each of which is capable of hauling 240-tons of coal, or the equivalent of two railroad cars, to be completed by the end of 2014.

Plum Energy’s LNG plant at the Eagle Butte Mine, scheduled to come online in March 2015, will be able to produce 28,500 gallons of LNG a day. In addition, Plum Energy has designed an LNG refueling station that will be constructed on-site at Eagle Butte, which will be capable of refueling eight trucks simultaneously.

“We are delighted to assist in bringing cleaner burning, lower cost LNG to Alpha Coal West and to Wyoming,” said Kirt Montague, chief executive officer of Plum Energy. “This project not only will reduce fuel costs for Alpha Coal West, but will also help solidify supply lines for other LNG users in the Powder River Basin.”

Alpha Natural Resources President Paul Vining says, “The construction of the LNG plant fits with ongoing efforts to control costs. Switching the Alpha Coal West fleet to the combined use of LNG and diesel will also lead to more efficient operation and longer engine life for the trucks.”

“We are excited by this development,” said Jason Green, President and CTO of GFS Corp. “Alpha Natural Resources continues to demonstrate their vision of a more sustainable and efficient future for mining operations. They have been a terrific partner and we are committed to continuing to provide them with state of the art natural gas + diesel solutions for their fleet.”

Alpha Coal West’s demand for LNG is expected to be about 6,400 gallons a day to fuel its trucks. As the plant grows, excess product can be sold to other companies in the area as they convert their haul trucks and other equipment to the lower emission and cost-efficient LNG.

Avista Makes Annual Price Adjustment Requests in Washington

SPOKANE, Wash. Avista filed its annual Residential Exchange Program and Purchased Gas Cost Adjustment (PGA) requests that would result in a 0.6 percent decrease in electric revenue, and increase natural gas revenue by 1.2 percent in Washington, if the requests are approved by the Washington Utilities and Transportation Commission (UTC). A Nov. 1, 2014 effective date was requested for the two adjustments, which have no impact on company earnings.

Electric Adjustment

The electric adjustment is related to the Bonneville Power Administration (BPA) Residential Exchange Program. The Residential Exchange Program provides a share of the benefits of the federal Columbia River power system to the residential and small farm customers of the investor-owned utilities in the Pacific Northwest, including Avista. Avista applies the benefits it receives, which typically fluctuate from year to year, to customers as a credit on their monthly electric bill.

In 2014, Avista received a higher level of benefits than it had projected in last year’s rate adjustment. As a result of the increased level of benefits, residential and small farm customers using an average of 965 kilowatt hours per month could see their monthly bill decrease from $80.09 to $79.03, a decrease of $1.06 per month or 1.3 percent, effective Nov. 1, 2014, if the UTC approves Avista’s request.

Natural Gas Adjustment

The annual Purchased Gas Cost Adjustment (PGA) is filed each year to balance the actual cost of wholesale natural gas purchased by Avista to serve customers with the amount included in rates. This includes the natural gas commodity cost as well as the cost to transport natural gas on interstate pipelines to Avista’s local distribution system.

If the request is approved by the UTC, an Avista residential customer using an average 65 therms per month could expect his or her bill to increase by $0.77, or 1.3 percent, for a revised monthly bill of $61.96 beginning Nov. 1, 2014. The filing would result in an overall increase of 1.2 percent or $1.9 million. Avista serves approximately 150,000 natural gas customers in Washington.

The primary driver for the company’s requested increase is related to increased wholesale natural gas prices which were caused, in part, by a colder than normal winter throughout the United States this past heating season. The colder than normal winter led to an increase in overall natural gas demand and a heavy reliance on natural gas storage reserves. The cold weather and increased demand put upward pressure on natural gas prices during the winter and this trend continued as natural gas companies have been replenishing their natural gas storage facilities.

To help customers proactively manage their energy use, Avista offers a number of energy efficiency programs, energy-saving information, rebates and incentives. Avista also provides energy assistance programs and payment options for qualifying customers. Information about these customer programs and options is available at

AGA Launches Threat Information Sharing Center for Natural Gas Utilities

Washington, D.C. – The American Gas Association (AGA) today launched a new tool to help further enhance the security of natural gas utilities. The Downstream Natural Gas Information Sharing and Analysis Center (DNG ISAC) is a platform for sharing cyber and physical threat intelligence, incident information, analytics and tools. Now fully operational, the DNG ISAC will help local natural gas utilities throughout the nation share and access timely, accurate and relevant threat information as part of their continued commitment to the safe and reliable delivery of natural gas to the more than 177 million Americans who rely on it to meet their daily needs.

“Information-sharing is a fundamental pillar of a robust cyber and physical defense effort,” said AGA President and CEO Dave McCurdy. “The DNG ISAC is tailored to address the distinct operational needs of the downstream natural gas sector and provides the technological sophistication and coordination necessary to meet the ever-changing threats of the 21st century.”

Information Sharing and Analysis Centers (ISACs), as described by the National Council of ISACs, are trusted entities established by critical infrastructure sectors to provide comprehensive analysis that may be shared within the sector, with other sectors and with government. ISACs take an all-hazards approach to combating threats with services including risk mitigation, incident response, alert systems and information sharing. There are currently more than one dozen ISACs covering a wide range of industry sectors, including the electric, nuclear, financial, telecommunications, information technology and water industries. Combination gas and electric utilities, which already access the Electric Subsector (ES) ISAC for electric threat information, will eventually also be able to access the DNG ISAC, and vice-versa. This integration of the two ISACs will strengthen situational awareness of these two industries for the ultimate benefit of their shared customers.

Partnership between the private sector and the federal and state governments is the key to addressing cybersecurity threats to our nation’s critical infrastructure. In addition to facilitating the sharing of best practices among its more than 200 member companies, AGA chairs the Cyber Security Working Group for the Oil & Natural Gas Sector Coordinating Council, an operators’ forum supported by the U.S. Department of Energy, in coordination with the U.S. Department of Homeland Security, to promote effective security strategies and activities, policy and communication across the oil and natural gas sector to achieve the nation’s homeland security mission.

“AGA and our member companies continue to take a leading role in efforts to help ensure the security and resiliency of the natural gas delivery system – allowing customers and the nation to benefit from our abundance of clean, domestic natural gas for decades to come,” said McCurdy. “A natural gas utility’s ability to deploy the best cybersecurity defense for their system depends on an environment that fosters increased operator awareness of cyber-attacks and intrusion activities, increased information sharing, flexibility to utilize appropriate cybersecurity platforms and increased training. The DNG ISAC will play a key role in facilitating that environment.”